State May Penalize Grocers Over Ads

In what officials are describing as an unusual violation of the state’s California Grown marketing campaign, Ralphs Grocery Co. and its sister Food 4 Less chain could face steep fines for advertising Mexican-grown grapes as coming from California farms.

The California Department of Food and Agriculture, responding to complaints from farmers, has launched a formal review of the violation.

The inquiry could result in referral to the attorney general for prosecution and fines as high as $3,000 for every misadvertised bag of fruit sold. Additionally, the department told the chains, owned by Cincinnati-based Kroger Co., to use in-store signage and other material to clearly indicate they were selling grapes grown in Mexico, said Steve Lyle, the agency’s spokesman.

Terry O’Neil, spokesman for the 315-store Ralphs chain, confirmed that both of the Kroger divisions had advertised Mexican grapes incorrectly in what he called an honest mistake that was quickly corrected when the stores learned of the error.

Food 4 Less, which operates 140 stores in California, made the error when pitching green seedless grapes in its June 29 fliers sent to homes. Ralphs repeated the mistake when it put red globe grapes in this week’s fliers. O’Neil said that each chain had its own marketing staff and that it was only a coincidence that similar mistakes occurred in successive weeks.

Growers, who have struggled to convince shoppers of the value of purchasing California-grown fruit over less expensive imports, questioned Ralphs’ explanation.

“It seems highly unlikely that they would make the same mistake twice,” said Robert Bianco, owner of Anthony Vineyards Inc. in Riverside County’s Coachella Valley. “It just doesn’t seem right.”

Farmers in the region, which produces the nation’s early-season table grape crop, also pointed out that as of Thursday, Ralphs continued to label Mexican red globe grapes with the marketing campaign’s distinctive “CA GROWN” license plate logo in its Internet advertising. State law prohibits the misuse of the logo or the term “California grown.”

The 4-year-old California Grown campaign is a joint effort of farmers and the state to bolster the value and consumption of California agricultural products. Trade associations representing producers of everything from apples to wine have signed up to use the logo to market their goods.

“Anytime the logo is misused, it is serious,” said Scott Horsfall, chief executive of Buy California Marketing Agreement, the organization that manages the program. Horsfall said he was disappointed by the Kroger advertising but was glad that the misuse by the Kroger units was spotted quickly and corrected.

Blaine Carian, vice president of Desert Fresh Inc. in Coachella discovered the Food 4 Less error by visiting a store, where he found that grapes listed in the advertisement as California-grown were packaged in bags with a “Produce of Mexico” label.

The Ralphs mistake was more obvious.

“If you have California-grown [red] globe grapes at this time, they have to be mine,” said Bianco, who owns 1,500 acres of vineyard. “And I have not sold any to Ralphs.”

Ralphs’ O’Neil said his company’s marketing department decided to feature globe grapes in the latest circular almost two months ago.

“We anticipated that we would be able to buy California globe grapes, but they were unavailable,” he said.

The chain purchased Mexican grapes and failed to change its advertisement or post corrections in its stores until told to do so by the state.

It’s unclear how hard Ralphs looked for a domestic source, said Bianco, who produces 99% of the domestic red globe crop at this time of year, adding that Ralphs never contacted him.

During the early months of the grape harvest, Kroger’s chains typically purchase Mexican grapes because they are less expensive than Coachella Valley fruit, said Carian, who farms 800 acres of early-season table grapes.

“Albertsons, Safeway and Wal-Mart support the California industry at this time of year when there are competing Mexican grapes,” Carian said. “But the Kroger stores buy Mexican.”